PREPARING FOR AUTOMATIC ENROLMENT

PREPARING FOR AUTOMATIC ENROLMENT ILLUSTRATIVE EMPLOYERS BRIEFING SLIDES 1/ 22

OUR EXPERTISE. YOUR AMBITION. 2/ 22

TABLE OF CONTENTS INTRODUCTION TO TAIT WALKER WEALTH MANAGEMENT ABOUT TAIT WALKER WEALTH MANAGEMENT MEET THE TEAM WHAT IS AUTOMATIC ENROLMENT? WHY HAS AUTOMATIC ENROLMENT BECOME NECESSARY? THE STEPS OF AUTOMATIC ENROLMENT STAGING DATE PROFILE DEFINITIONS OF PENSIONABLE PAY (1) DEFINITIONS OF PENSIONABLE PAY (2) PHASING IN CONTRIBUTIONS PENSION PROVIDER MARKET THE AUTOMATIC ENROLMENT JOURNEY AT A GLANCE WHAT OUR CLIENTS SAY CASE STUDY (1) CASE STUDY (2) OUR CREDENTIALS WHY HAVE WE BEEN SO SUCCESSFUL HELPING OUR CLIENTS 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 3/ 22

INTRODUCTION TO TAIT WALKER WEALTH MANAGEMENT We are whole of market Financial Planners and fully independent. This means that we choose from the entire financial market place and are not restricted to one provider when we deliver innovative solutions for both individuals and businesses. 4/ 22

ABOUT TAIT WALKER WEALTH MANAGEMENT Our Wealth Management specialists have over seventy years experience discover how we can help you to plan for the future Whether you re an individual, a business owner or a trustee you need a wealth management expert to work with you in order to fully understand your financial goals and help you to take the right steps to achieve them. Our expert Financial Planners create a tailored strategy which works for you and assesses your needs at every stage of life and in business. Our specialist financial planning team provide clients with advice on a wide range of matters including investments, retirement, pensions and mortgages. Tait Walker Wealth Management work hand in hand with our accountancy colleagues and together we have 145 team members located across three office in Newcastle, Teesside and Northumberland. 5/ 22

MEET THE TEAM Mark Parkinson Partner Mark joined Tait Walker in 2012 having previously worked within the banking sector. He is passionate about delivering a high quality, tailored wealth management service and developing long term business relationships which are built on trust and professionalism. Leonard Birnie Employee Benefits Administrator Leonard joined Tait Walker in October 2013 after graduating from Northumbria University with a Masters Degree. His role focuses on employee benefits and automatic enrolment. He is currently studying towards a Diploma in Financial Planning with the CII. Ian Marsh Employee Benefits Consultant Ian joined Tait Walker in 2005, having worked in pensions since 1989. Ian provides advice and support for employers and individuals regarding all aspects of Employee Benefits, with a particular emphasis on Automatic Enrolment and Qualifying Workplace Pension Schemes 6/ 22

WHAT IS AUTOMATIC ENROLMENT? The law on workplace pensions has changed. Every employer with at least one member of staff now has new duties, including putting those who meet certain criteria into a workplace pension scheme and contributing towards it. This is called automatic enrolment. It s called this because it s automatic for employees as an employee you don t have to do anything to be enrolled. Quick Automatic Enrolment Facts The government has introduced Automatic Enrolment to help people save more for their retirement It requires all employers to enrol their employees into a qualifying workplace pension scheme, if they are not already in one Your employer must make employer pension s (subject to certain criteria) Between July 2012 December 2014 over 5,135,000 employees have been automatically enrolled 1 1 Automatic Enrolment Declaration of compliance report, July 2012 end December 2014. 7/ 22

WHY HAS AUTOMATIC ENROLMENT BECOME NECESSARY? Lack of pension saving has become a major problem Current Life expectancy for men 78.5 Current Life expectancy for women 82.4 Increases in life expectancy mean that people will spend longer in retirement and so need to start making further provision for retirement Both of the above mean employees will have to save a greater proportion of their income to fund their retirement and maintain an acceptable standard of life in old age. years Current potential time spent in retirement 15 20 years years Income at retirement relying just on State Pension 113.10 per week 1 1 OECD (2013), Pensions at a Glance 2013: OECD and G20 Indicators, OECD Publishing. 8/ 22

THE STEPS OF AUTOMATIC ENROLMENT Quick Administrative and Financial Facts The Pensions Regulator (TPR) advise that you should begin planning 12 9 months prior to your staging date. 2 The total cost of auto enrolment related pension s in 2018 is estimated to be 11.6 billion in that year to these UK businesses. 3 Research has found that the total potential time burden could amount to the following: One-off time burden 103 man days Monthly recurring time burden 3.5 man days 4 2 http://www.thepensionsregulator.gov.uk/employers/your-plan-for-automatic-enrolment.aspx#review-pension-arrangements 3 Central for Economics and Business Research (2013), Finding your way out of the auto enrolment maze, page 4 4 Central for Economics and Business Research (2013), Finding your way out of the auto enrolment maze, page 7 9/ 22

STAGING DATE PROFILE Staff on payroll Past Staging Dates Staff on payroll 120,000 or more 1 October 2012 <30 with the last with the last two characters in their PAYE reference, numbers 92, A1-A9, B1-B9, AA-AZ, BA-BW, M1-M9, MA-MZ, Z1-Z9, ZA-ZZ, 0A-0Z, 1A-1Z or 2A-2Z 1 June 2015 50,000-119,999 1 November 2012 <30 with the last 2 characters in their PAYE reference - BX 1 July 2015 Future Staging Dates 30,000-49,999 1 January 2013 <30 with the last 2 characters in their PAYE reference - BY 1 September 2015 20,000-29,999 1 February 2013 <30 with the last 2 characters in their PAYE reference - BZ 1 November 2015 10,000-19,999 1 March 2013 <30 with the last 2 characters in their PAYE reference 02-04, C1-C9, D1-D9, CA-CZ or DA-DZ 1 January 2016 6,000-9,999 1 April 2013 <30 with the last 2 characters in their PAYE reference 00, 05-07, E1-E9 or EA-EZ 1 February 2016 4,100-5,999 1 May 2013 <30 with the last 2 characters in their PAYE reference 12-16, 3A-3Z, H1-H9 or HA-HZ 1 April 2016 4,000-4,099 1 June 2013 <30 with the last 2 characters in their PAYE reference I1-I9 or IA-IZ 1 May 2016 120,000 or more 1 October 2012 <30 with the last 2 characters in their PAYE reference 17-22, 4A-4Z, J1-J9 or JA-JZ 1 June 2016 50,000-119,999 1 November 2012 <30 with the last 2 characters in their PAYE reference 23-29, 5A-5Z, K1-K9 or KA-KZ 1 July 2016 350-499 1 January 2014 <30 with the last 2 characters in their PAYE reference 30-37, 6A-6Z, L1-L9 or LA-LZ 1 August 2016 250-349 1 February 2014 <30 with the last 2 characters in their PAYE reference N1-N9 or NA-NZ 1 September 2016 160-249 1 April 2014 <30 with the last 2 characters in their PAYE reference 38-46, 7A-7Z, 01-09 or 0A-0Z 1 October 2016 90-159 1 May 2014 <30 with the last 2 characters in their PAYE reference 47-57, 8A-8Z, Q1-Q9, R1-R9, S1-S9, T1-T9, QA-QA, RA-RZ, SA-SZ or TA-TZ 1 November 2016 62 89 1 July 2014 <30 with the last 2 characters in their PAYE reference 58-59, 9A-9Z, U1-U9, V1-V9, W1-W9, UA-UZ, VA-VZ or WA-WZ 1 January 2017 61 1 August 2014 <30 with the last 2 characters in their PAYE reference 70-83, X1-X9, Y1-Y9 XA-XZ or YA-YZ 1 February 2017 60 1 October 2014 <30 with the last 2 characters in their PAYE reference P1-P9 or PA-PZ 1 March 2017 59 1 November 2014 <30 with the last 2 characters in their PAYE reference 84-91 or 93-99 1 April 2017 58 1 January 2015 <30 unless otherwise described 1 April 2017 54-57 1 March 2015 Employer who does not have a PAYE scheme 1 April 2017 50-53 1 April 2015 40-49 1 August 2015 30-39 1 October 2015 10 / 22

DEFINITIONS OF PENSIONABLE PAY (1) Period Minimum employer Qualifying Earnings Minimum employee Tax relief Minimum total Staging Date 31 st March 2018 1% 0.8% 0.2% 2% 1 st April 2018 31 st March 2019 2% 2.4% 0.6% 5% 1 st April 2019 3% 4% 1% 8% Qualifying earnings are band of earnings of more than 5,824 and 42,385 or less [Tax Year 2015/16]. Qualifying earnings include: Salary Overtime Bonuses Commission Statutory Maternity Pay Statutory Paternity Pay Statutory Adoption Pay Statutory Sick Pay 11 / 22

DEFINITIONS OF PENSIONABLE PAY (2) Period Tier 1 9% of Pensionable Pay Minimum employer Minimum employee Tax relief Minimum total Staging Date 31 st March 2018 2% 0.8% 0.2% 3% 1 st April 2018 31 st March 2019 3% 2.4% 0.6% 6% 1 st April 2019 4% 4% 1% 9% Period Tier 2 8% of Pensionable Pay (provided that at least 85% of total payroll is pensionable) Minimum employer Minimum employee Tax relief Minimum total Staging Date 31 st March 2018 1% 0.8% 0.2% 2% 1 st April 2018 31 st March 2019 2% 2.4% 0.6% 5% 1 st April 2019 3% 4% 1% 8% Period Tier 3 7% of All Earnings (*) Minimum employer Minimum employee Tax relief Minimum total Staging Date 31 st March 2018 1% 0.8% 0.2% 2% 1 st April 2018 31 st March 2019 2% 2.4% 0.6% 5% 1 st April 2019 3% 3.2% 0.8% 7% (*) Earnings must include everything that s included in the definition of qualifying earnings 12 / 22

PHASING IN CONTRIBUTIONS HOW MUCH WILL PAYING PENSION CONTRIBUTIONS COST MY BUSINESS? Period (#) Minimum employer Minimum employee (*) Tax relief (*) Minimum total Staging Date 31 st March 2018 1 st April 2018 31 st March 2019 1 st April 2019 - onwards???? 1% 0.8% 0.2% 2%???? 2% 2.4% 0.6% 5%???? 3% 4% 1% 8% (#) Depending on the company s Staging Date (*) Assuming employer pays the minimum allowed 13 / 22

PENSION PROVIDER MARKET Contract-Based Scheme Trust-Based Scheme Please note This list is not exhaustive and in no particular order 14 / 22

THE AUTOMATIC ENROLMENT JOURNEY AT A GLANCE Review existing scheme Produce bespoke report for client Design solution with client Complete test upload Complete live upload Obtain payroll data Approach the market Create project plan Integrate payroll Send letters Assess payroll Assess payroll capability Implement scheme Engage workforce Complete Declaration of Compliance Please note This list is not exhaustive and may not demonstrate YOUR automatic enrolment journey 15 / 22

WHAT OUR CLIENTS SAY George F White Tait Walker have demonstrated a high level of client service throughout our Automatic Enrolment process. They have been very flexible and demonstrated real value for money. We wouldn t hesitate to recommend them to others. Ian Marshall Operations Director NECA In acting as our advisers Tait Walker have always been available to offer us support and advice as they have guided us through the sometimes tricky and complicated process of Auto Enrolment. When called upon they have found solutions and helped resolve quirks and issues that could not have been anticipated or planned for. Their ongoing assistance is invaluable to us. Clare Griffiths Finance Manager 16 / 22

CLIENT CASE STUDY (1) Client Background The client is a well respected supplier to major aerospace companies worldwide and has a worldwide presence. The company has three primary businesses within it corporate structure that specialises in developing products within the aerospace industry, designing and manufacturing ice protection systems and producing green technologies for aeronautical applications. The client was a pre-existing client of our firm and had an existing pension scheme in place before their automatic enrolment duties began. By staging date, Tait Walker Wealth Management had advised the client their position under the automatic enrolment legislation, whilst approaching the existing pension provider to ensure the scheme would be made compliant for automatic enrolment on the client s behalf. Alongside this Tait Walker provided payroll support to the employer to ensure administrative processes were streamlined and the client s payroll staff were trained how to use the payroll software. Tait Walker Wealth Management are now responsible for the complete administration of the pension scheme and are currently in discussions with the client to implement a HMRC approved salary sacrifice scheme to ensure all pension s are made in the most tax-efficient manner for both the client and their employees. Scope of engagement: Pension advice and administration Payroll support and outsourcing Salary sacrifice implementation and support Testimonial Tait Walker has been looking after the employee benefits scheme that we have in place for a number of years now and has always been there to guide us through the products and services available in the marketplace to meet our requirements. The fact that we can call on both Employee Benefit and Sage payroll specialists from the same company is invaluable and saves us a considerable amount of time and effort. Finance Director 17 / 22

CLIENT CASE STUDY (2) Client Background The client is a well known regional supplier of pre-owned games consoles as well as other digital media. The company has 70+ stores throughout the UK that specialises in the buying and selling of digital technology and are currently under going rapid expansion. The client was a pre-existing payroll client of our firm, but had no existing pension provision in place to meet the needs of their automatic enrolment obligations. By staging date, Tait Walker Wealth Management had conducted detailed discussions with the client to ascertain the business needs, the budgetary implications of automatic enrolment and the most cost efficient way of implementing a compliant workplace pension scheme. We were able to add value to the client through our close relationship with our payroll and tax team which meant the seamless implementation of a compliant and cost effective automatic enrolment scheme. Tait Walker Wealth Management are now responsible for the ongoing review of the scheme to evaluate the fund performance and suitability of the scheme within the context of the client s automatic enrolment needs. Scope of engagement: Pension advice and administration Ongoing Scheme Governance and compliance Payroll processing and support Testimonial Tait Walker have always provided exception service as our payroll bureau. Together with their Wealth Management Team they were able to completely take away our automatic enrolment headache. Automatic enrolment is a complex responsibility for employers and we have complete confidence in Tait Walker to advise us in every capacity of our employee benefit package. HRManager 18 / 22

OUR CREDENTIALS We currently actively manage 100+ pension schemes and have experience of assisting clients with their automatic enrolment duties since October 2012. Please find below some of the clients we have helped: Client Employee Numbers Staging Date Provider Assigned Residential Care Home Chain 1000+ April 2014 Master Trust National Lettings Agent 96 February 2014 Scottish Widows Aerospace Manufacturer 320 February 2014 Standard Life Regional Charity 325 April 2014 Scottish Widows Regional Law Firm 297 April 2014 Scottish Widows Car Sales Company 73 July 2014 Master Trust Aluminium Die-Casting Specialist 63 March 2015 Royal London Chemist Chain 10 July 2017 Master Trust 19 / 22

WHY HAVE WE BEEN SO SUCCESSFUL HELPING OUR CLIENTS? OUR APPROACH Tait Walker Wealth Management - Insurance market research - Scheme recommendation - Automatic enrolment support Tait Walker Tax Advisory Services - Salary sacrifice communication - Salary sacrifice implementation - Salary sacrifice scheme review Automatic Enrolment Solution Tait Walker Payroll Department - Designated Sage resellers - Payroll outsourcing - Sage (AE) training Tait Walker Business Services - Internal audits - Growth voucher advice - Specialist Not for Profit advice Please note Tait Walker Tax Advisory Services, Business Services and Payroll Department are not regulated by the FCA 20 / 22

Tax and legislation are likely to change. The information given here is based on Tait Walker Wealth Management s understanding of law and HMRC practice at the date of presentation Tait Walker Wealth Management is a trading style of Tait Walker Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority Automatic Enrolment is not regulated by the FCA. 21 / 22

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